I think the idea is to attempt to dissuade them from passing the law in the first place. In a war, it's better if you can sap the enemy's will to fight rather than actually engaging in battle. Gathering all those signatures and then electioneering would deplete resources that could be better employed elsewhere.
On the other hand, I could make an argument for wanting it on the March ballot. Ward Connerly's Racial Privacy Initiative will be on that one as well, and those two issues would bring out a lot of conservatives, who'd also vote for the Republicans in the various races.
So, if the Dems are thwarted and don't even pass the measure, that's fine, and if it ends up on the ballot, I guess that's fine too.
McClintock has nicely trapped the Dems. The Car Tax increase was the one significant "revenue enhancement" that arguably did not require a 2/3 majority vote, and which the Democrats could therefore pass without the support of any Republicans. They wanted to use that to bargain with the Republicans for a compromise: Higher taxes elsewhere (e.g., on sales or income) and minimal spending cuts.
Now McClintock has effectively eviscerated the Democrats' bargaining position. He's told them that they can't raise the Car Tax. If they try, they still won't get any new revenues to cover this year's budget deficit, and they'll be horribly embarrassed when the voters swat them down at the next election. So their only option is to cut spending to balance the budget, and that is the thing they hate the most.